Porto’s €40m bond plan shifts debt, not the bill

On the afternoon of 28 October 2026, FC Porto SAD sent Portugal’s securities regulator, the CMVM, details of a new bond issue. The announcement sets out a four-year refinancing plan against a December debt deadline, with the cost of the new borrowing partly tied to the first team’s results.

The immediate target is €55 million of FC Porto SAD bonds due on 7 December 2026. The SAD plans to raise up to €40 million, using subscription proceeds to help repay that maturity, while existing holders can exchange bonds due in 2026 for new bonds due in 2030. The new issue starts at 5.25 per cent interest, with increases linked to specified first-team results. The structure offers Porto another route through a looming repayment, while the amount still to cover depends on subscriptions and exchanges.

The offer gives existing bondholders a choice between taking repayment in December and carrying their investment forward. From 2 to 13 November, holders can exchange each €5 bond due in 2026 for one €5 bond maturing in 2030.

That choice matters because every bond exchanged reduces the amount FC Porto SAD has to repay in December, while leaving the same principal outstanding until the new maturity. Investors who subscribe for new bonds instead provide fresh money towards the repayment. The SAD estimates that the offer will produce about €38.6 million in net proceeds, below the €40 million maximum issue size.

The issue is not guaranteed to cover everything. FC Porto SAD says that if proceeds fall short of the 2023–2026 bonds left outstanding after exchanges, it expects to use income from its activities or obtain additional financing.

The new bonds start with a fixed annual interest rate of 5.25 per cent. The 2023–2026 bonds carry 6.25% interest, so the new base rate is lower, although performance-linked increases could take it to 6%. But specified results by FC Porto’s first team across the 2026/27, 2027/28 and 2028/29 seasons can permanently increase what the SAD pays.

Each national championship won adds 0.1 percentage points to the rate; each qualification for the Champions League league phase adds 0.15 points. The increases accumulate, so success in more than one season can push the rate higher, although the total rise is capped at 0.75 percentage points.

That puts the maximum annual gross rate at 6 per cent.

Any rise applies from the interest-counting period that begins on 18 November in the year the qualifying result is confirmed. The first possible adjustment could take effect in 2027, with later results in the three-season window able to add further increases until the cap is reached.

The latest accounts show FC Porto SAD returning to a loss after a profitable 2024/25. The company reported a €21.1 million loss for 2025/26, compared with a €39.2 million profit the year before, according to CNN Portugal and Observador. FC Porto SAD attributed the loss to Europa League participation not being offset by €56 million in player-transfer proceeds, and said it chose to retain key squad players.

The balance sheet also weakened. At the end of 2025/26, negative equity had grown to €29.67 million from €10.46 million a year earlier, CNN Portugal reported. Negative equity means the company’s liabilities exceed its assets; the gap had nearly trebled over the year.

Liabilities rose by six per cent to €552.7 million, while assets increased by three per cent to €523 million. The assets figure remained below the liabilities total, and the faster growth in liabilities widened the deficit in the SAD’s accounts.

The administration’s account of its wider refinancing effort offers a different measure of progress.

The administration points to a separate measure of progress: FC Porto SAD said its net financial debt at the end of 2025/26 was €29 million lower than at 30 June 2025. It also said the debt had been arranged over longer maturities and at a lower average cost.

Pereira da Costa, the SAD’s financial administrator, linked that approach to the €115 million Dragon Notes issued for 25 years in 2024/25. He told O Jogo that the notes helped to extend debt maturities and reduce financing costs by €6 million.

“extend its maturity and reduce the financial cost by six million”

The new prospectus has also cleared a formal hurdle: Portugal’s securities regulator, the CMVM, approved it. That approval allows the issue to proceed, while the accounts still show a loss and negative equity.

The new issue sits within a larger bond burden than those reported for Porto’s main domestic rivals. Maisfutebol put FC Porto SAD’s bond borrowing at €230.78 million in 2026, compared with €90.2 million for Sporting and €168.6 million for Benfica. The comparison is not limited to the latest offer: it captures the club’s wider use of bonds to raise finance.

The same report’s 2025 figures show that the gap was already substantial. Porto’s bond borrowing stood at €229.5 million, against €90 million at Sporting and €153.6 million at Benfica. Porto’s reported total edged higher in 2026, while both rivals’ figures also rose. The planned €40 million issue is therefore part of a financing approach already larger than either competitor’s, rather than an isolated borrowing decision.

The announcement FC Porto SAD sent to the CMVM on 28 October now faces two tests: how investors respond, and what the team achieves over the seasons named in the offer. The coming dates will show how much of the plan takes shape before the December deadline.

• By 10 November: whether FC Porto SAD increases the initial amount of the bond issue.
• At 15:00 on 13 November: the subscription and exchange offers close, revealing how many existing bonds have been moved to 2030.